CORRECTED-Canada housing agency cuts 2013 forecast, sees firmer 2014

Fri Feb 22, 2013 1:17pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Corrects prior forecast for 2013 starts in 7th para)

* CMHC says economic slowdown to dampen demand in 2013

* Price gains slowing, but prices still above 2012 levels

* Agency says rate increases might moderate 2014 rise

By Andrea Hopkins

TORONTO, Feb 22 (Reuters) - Canada's federal housing agency scaled back its forecast for homebuilding in 2013 on Friday, saying that a slowdown in economic growth and job gains will dampen demand for new homes, the latest sign that Canada's housing market is cooling rapidly.

The Canada Mortgage and Housing Corp said that while it expects the housing market slowdown that hit in the second half of 2012 will continue into 2013, it believes momentum will return later in 2013 and 2014.

"CMHC expects housing construction activity will trend lower in the first half of 2013, before gaining more momentum by the end of the year as economic and employment growth remain supportive of the Canadian housing market," CMHC Deputy Chief Economist Mathieu Laberge said in a statement.

"In 2014, improving economic conditions may be partially offset by a slight moderation in the number of first-time homebuyers, and potential small and steady increases in mortgage interest rates."   Continued...